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Income Tax Appellate Tribunal - Kolkata

Dcit, Cc-Xiii, Kolkata, Kolkata vs M/S. Dhoot Developers Pvt. Ltd., ... on 30 April, 2019

    IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA

             [Before Hon'ble Shri S.S. Godara, JM & Shri Dr. A.L. Saini]
                         I.T (SS)) No.127/Kol/2014 A.Y 2007-08

DCIT, CC-XIII, Kolkata                   Vs.           M/s. Dhoot Infrastructure
                                                       Projects Pvt. Ltd.
                                                       PAN: AACCD2118H
    (Appellant)                                             (Respondent)

                         I.T (SS)) No.128/Kol/2014 A.Y 2008-09
                         I.T (SS)) No.129/Kol/2014 A.Y 2009-10

DCIT, CC-XIII, Kolkata                   Vs.           M/s. Dhoot Developers Pvt. Ltd.
                                                       PAN: AABCD 5433A
    (Appellant)                                                (Respondent)

For the Appellant /Department       :   Shri P.K. Srihari, CIT, ld.DR
For the Respondent /Assessee        :   Shri A.K.Tulsiyan, FCA &
                                        Miss Sikha Agarwal, FCA, ld.ARs


             Date of Hearing :           24-04-2019

             Date of Pronouncement :     30 -04-2019


                                        ORDER

Shri S.S. Godara, JM:

1. This three Revenue's appeal for assessment years 2007-08, '08-09 & '09-10 arise against the CIT(A), Central-II, Kolkata's separate orders dated 28-05-2014 passed in case nos. 167/CC-XIII/CIT(A)C-II/14-15, 162/CC-XIII/CIT(A)C-II/14-15 and 163/CC-

XIII/CIT(A)C-II/14-15 involving proceedings u/s 147/143(3)/153D/153A of the Act.

Heard both the parties. Case files perused.

IT(SS) No.127/Kol/2014 A.Y 2007-08 IT(SS) No.128/Kol/2014 A.Y 2007-08 IT(SS) No. 129/Kol/2014 A.Y 2007-08 Department Vs. M/s. Dhoot Infrastructure Projects Pvt. Ltd & M/s. Dhoot Developers Pvt. Ltd

2. We come to Revenue's first appeal in IT(SS) No. 127//Kol/2014 for the A.Y 2007- 08 in former assessee M/s. Dhoot Infrastructure Projects Pvt. Ltd's case. Suffice to say, it transpires at the outset that the department had carried out two searches on 25-09- 2008 and 24-01-2012 in assessee's case. Both the corresponding assessments added the assessee's share application/share premium money amounting to Rs.5.75 crores as unexplained cash credits u/s. 68 of the Act. There is no dispute that the instant case pertains to the latter search, wherein the CIT(A) has followed his predecessor i.e the CIT(A)-III, New Delhi's order dt. 19-12-2011 deleting the very addition in former search assessment. We sought to know the final outcome of the Revenue's appeal, if any, in the said former round rising the issue of unexplained cash credit in the nature of assessee's share application/premium. We are informed that the Revenue's appeal ITA No. 931/Del/2012 involving the said former round is pending before the tribunal. We deem it fit and appropriate as agreed between the parties concerned that the instant case requires to be restored back to the file of the Assessing Officer to await the final outcome in Rrevenue's said appeal. We order accordingly.

3. The Revenue's instant first appeal-IT(SS) No.127/Kol/2014 in former assessee's case is allowed for statistical purposes in above terms.

4. Same order is also to follow in Revenue's second appeal-IT(SS) No. 128/Kol/2014 for the A.Y 2008-09 involving the latter assesse, M/s. Dhoot Developers Pvt. Ltd, wherein the Assessing Officer had added the identical share application/premium money of Rs.5.75 crores as unexplained cash credits and the CIT(A) deleted the same by following the lower appellate order in first round of search.

IT(SS) No.127/Kol/2014 A.Y 2007-08 IT(SS) No.128/Kol/2014 A.Y 2007-08 IT(SS) No. 129/Kol/2014 A.Y 2007-08 Department Vs. M/s. Dhoot Infrastructure Projects Pvt. Ltd & M/s. Dhoot Developers Pvt. Ltd We are informed that the Revenue's appeal-IT(SS) No. 932/Del/2012 involving the said former round is pending before the tribunal. We order accordingly.

5. The Revenue's second appeal-IT(SS) No.128/Kol/2014 is allowed for statistical purposes in above terms.

6. Last case Revenue's appeal-IT(SS) No. 129/Kol/2014 for the A.Y 2009-10 seeking to revive section 40A(2)(b) addition of Rs. 40,00,000/-. Case file suggests that the co-ordinate bench in IT(SS)A No. 34/Kol/2013 decided on 19-10-2016 relevant to the former round of search has declined the raising ground as follows:-

"4. The last ground to be decided in this appeal is as to whether the ld. CITA justified in deleting the addition of Rs.40 lacs made by the ld.AO on account of undercharging of sales to group companies in the facts and circumstances of the case.

4.1. The brief facts of this issue is that the Id AO observed that the sizeable portion of the sales of R$. 52.52 crores has been made to group company i.e Dhoot Infrastructure Project Ltd and Essel Housing who contributed the land. The assessee was asked to give bifurcation of sale rate with respect to each sale and to furnish details of each sale which could not be furnished by the assessee. Accordingly the Id AO concluded that the underpricing of the sale amount to the group companies cannot be ruled out and held that the sale made to group companies would be covered u/s 40A(2)(b) of the Act. He also held that the huge sales are shown as Sundry Debtors under the name M/s Dhoot Infrastructure Projects Ltd and no interest is Charged on these sundry debtors for belated payments. Hence he made an estimated addition of Rs.40,00,000/- on account of undercharging of sales.

4.2. The assessee submitted that there was no sale made to Essel Housing who contributed the land. The assessee stated that the ld AO did not seek any information during the course of assessment proceedings. The Id CITA deleted the addition by observing as under:-

IT(SS) No.127/Kol/2014 A.Y 2007-08 IT(SS) No.128/Kol/2014 A.Y 2007-08 IT(SS) No. 129/Kol/2014 A.Y 2007-08 Department Vs. M/s. Dhoot Infrastructure Projects Pvt. Ltd & M/s. Dhoot Developers Pvt. Ltd " On going through the details of total sales made by the appellant, it is seen that out of the total sales amounting to Rs. S2, 53, 19,562, the appellant has made the sales of 6289 square feet to Dhoot Infrastructure at a selling price of Rs. 5000 per square foot and 4879 square feet is sold at Rs.4950 per square feet and this rate of per square feet is the more than the rate charged from other 108 parties in number, to whom the appellant has sold the units, ranging from Rs.2, 100 per square feet to Rs.4,500 per square feet.

In view of the above stated facts I don't see any reason of underpricing of sales made to group company, accordingly the addition of Rs. 40 lacs deserves to be deleted. "

4.3. Aggrieved, the revenue is in appeal before us on the following ,ground :-

13. That on the facts and in the circumstances of the case and in law the Ld. CIT(AJ erred in deleting the addition made by the AO on account of under charging of sales. made to group companies.

14. That on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in not considering the fact that no interest had been charged by the assessee on sundry debtors. "

4.4. The Id OR vehemently relied on the order of the Id AO. The ld AR vehemently relied on the order of the ld CITA.

4.5. We have heard the rival submissions. We find that the Id CITA had given a finding on verification of the accounts of the assessee that the sales made to group companies were made at rates which are more than that made to others . This fact has not been controverted by the revenue before us. We find mat the instant addition was made u/s 40(A)(2)(b) of the Act by theJ,1 AO in respect of undercharging of sales made to group companies. We find that the provisions of section 40A(2)(b) of the Act only speaks about payments made by an assessee and not the sales made thereon. We hold that the said provisions have been wrongly invoked by the Id AO and the same cannot be made applicable in any stretch of imagination. We do not find any infirmity in the order of the Id CITA. Accordingly, the Grounds 13 & 14 raised by the revenue are dismissed."

IT(SS) No.127/Kol/2014 A.Y 2007-08 IT(SS) No.128/Kol/2014 A.Y 2007-08 IT(SS) No. 129/Kol/2014 A.Y 2007-08 Department Vs. M/s. Dhoot Infrastructure Projects Pvt. Ltd & M/s. Dhoot Developers Pvt. Ltd

7. We conclude in these peculiar facts and circumstances that the Revenue's instant grievance has no legs to stand since the co-ordinate bench in assessee's own case (supra) has deleted the impugned disallowance made u/s. 40A(2)(b) of the Act. This last appeal IT(SS) A No. 128/Kol/14 fails

8. These Revenue's former two appeals i.e IT(SS) Nos. 127 & 128/Kol/2014 are allowed for statistical purpose and last appeal IT(SS) No. 129/Kol/2014 is dismissed.

            Order pronounced in the Court on 30-04-2019




     Sd/-                                                           Sd/-
[ Dr. A.L. Saini ]                                            [ S.S.Godara ]
Accountant Member                                           Judicial Member

 Dated : 30 -04-2019
**PRADIP, Sr. PS
Copy of the order forwarded to:

1. Appellant/Department: The DCIT,CC-XIII, Kol Aaykar Bhavan Poorva, 110 Shanti Palli, EM Bye Pass, 4th Fl., Kolkata-107..

2. Respondent/Assessee: assessee : M/s. Dhoot Infrastructure Projects P.Ltd/ M/s. Dhoot Developers P.Ltd 5 J.B.S Halden Avenue, Silver Arcade, 2nd Fl, Kolkata-105

3..C.I.T(A).- 4. C.I.T.- Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

        True copy                  By Order

                                                   Assistant Registrar
                                                  H.O.O/D.D.O Kolkata



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